Alcoa (AA) - Update Position

Written on February 24, 2009 – 2:00 pm | by admin

I took the liberty of selling my Acloa (AA) March calls into today’s rally in the general market. While this bounce may go further, I do believe that it will be short lived and that we will go through or bounce around the November lows in the S&P. With the global economy slowing, AA doesn’t look to be in a position of strength right now and I am okay holding it and taking in around 2% of my cost basis this month.  In order to get my 2%, I needed to sell a $7.50 which will require rolling forward should the price stay above that come March expiration week.  

Purchased: 200 @ 11.67
Initial Option Income: $1.95
Mar Option Income: $0.19
Other Option Income: $0.37
Dividend Income: $0.17
Expected Return: 9.26% (42.51% annually)
Last Period Expected Return: 5.84% (40.56% annually)
Option periods held: 3

* All return after buy and sell commissions
** Last Period Expected Return is the return I would have gotten if my option was exercised instead of expired. 


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